Panelists at the Saratoga Institute on Racing and Gaming Law Aug. 12 in Saratoga Springs, N.Y. painted a picture of increased compliance in the wake of a 2008 investigation into wage practices by the state of New York.
Titled "Labor and Immigration Law in the Racing Industries," the panel featured anecdotes of backstretch life by Jim Gallagher, the executive director of the New York Thoroughbred Horsemen's Association, and trainer Gary Contessa, as well as a report on noncompliance by Tricia Kakalec, an attorney from the New York State Office of the Attorney General.
It's a misperception, said Gallagher, that the backstretch workers are a "huge undocumented workforce that is slave labor" to racing, saying that the New York Gaming Commission licenses everyone who works on the backstretch and that the New York Racing Association will not issue a badge to anyone who is not licensed.
"This is a highly regulated industry," he said.
Gallagher also said that trainers are responsible for having a pay-rate schedule that includes rates of pay and overtime, and a payday schedule, both of which are given to new employees.
Contessa talked about the difficulty of finding reliable employees, saying that in his years of posting job openings in local newspapers and with the state Department of Labor, he has never received a query from anyone in the communities near the racetrack.
"There are very few Americans looking for backstretch work," he said, emphasizing the importance of the H-2B visa worker program that allows U.S. employers to hire foreign nationals for temporary, non-agricultural jobs.
"My employees work 5 1/2 days a week," Contessa said. "Grooms make $16 an hour. Hotwalkers make $11 an hour and time and a half."
The positive impressions created by Gallagher and Contessa were in contrast to the Kakalec's review of the findings of the 2008 investigation, in which 110 backstretch workers were interviewed.
"We found that 80% were not paid minimum wage or overtime," she said. The investigation estimated that more than a 1,000 workers were owed back pay, and that hotwalkers were underpaid by an average of $71.65 per week, and grooms by an average of $82.31. Aggregated over the course of a year, that would mean $3,725.80 a year for hotwalkers and $4,280.12 for grooms.
Interviews with 88 trainers at Saratoga in 2008 revealed that 77% didn't keep legally required records related to time and payroll.
Among the biggest infractions were the frequency of paydays and the prevalence of weekly wage rates that didn't take into account the numbers of hours worked.
Kakalec noted that improvements since that investigation in both wage-per-hour compliance and record-keeping, though saying that issues persist in the latter.
Acknowledging that trainers can find record-keeping onerous and frustrating, Kakalec emphasized its importance.
"Without paperwork, we have no way of checking what's going on, and employees can't verify that they've been paid correctly," she said.
Contessa said that the investigation was a wake-up call for trainers who, he said, were used to keeping records "on a napkin in the back of the car."
Admitting that he paid $20,000 in back pay, Contessa said that both a lack of knowledge of employment law and a racetrack culture combined to create a culture of non-compliance.
"When I came to the racetrack, I came to work for (Hall of Fame trainer) Laz Barrera," he said. "If you were a groom and you came to work for Laz, you made $400 a week.
"Everybody got paid [by the week]. That was the way we learned. My teachers that I came up under, we had a set rate for grooms. The Department of Labor came in and taught us otherwise, and we've since figured it out. We now all have office staff."
While the presentation offered illustrations of increased compliance since 2008, impressions persist that the living and working conditions of backstretch workers are substandard and unattractive to a non-immigrant working community. As with many elements of the racing industry, the culture, as Contessa suggested, can be slow to change.
"Things can be an industry practice for years," said Kakalec, "and still be illegal."